Short AMZN, AOL, RNWK at your own risk, Overvalued stocks usually stay overvalued: MSFT,CSCO, INTC and the entire S&P 500 all in the same 'life raft' as AMZN, AOL and RNWK.
".....A word of warning: Just because 75 managers consider Amazon.com the market's most overpriced stock, and a further 48 feel the same way about America Online, that does not necessarily mean the shares of either company will deflate any time soon....shorting the stocks our panelists deem overvalued has never been a path to instant riches. It often takes a while for reality to catch up with the hype in such cases [This was also in the Barron's article]
.....William Priebe, of Geneva Capital Management in Milwaukee, reserves his bearish prognostications for the "new blue chips" such as Microsoft, Intel, and Cisco, all highflyers with gargantuan market values. "We see a crying need for a pullback in the S&P 500, or at the very least an extended period of stagnation," Priebe says. "The S&P is selling for about 27-28 times year-2000 earnings, depending on your earnings estimate. That's the highest multiple in history. People tell me, 'You old fogey, it's different this time.' Well, it was different in Japan a few years ago, too." ..Barron's article
AOL and AMZN did correct a bit already and I wouldn't be in a hurry to short therm,and would be just as cautious buying/shorting the S&P. Traders usually stay in 80-90% cash and trade off all the eventualities. |
